Bloomin' Brands: the Biggest Outback Franchisee Files for Bankruptcy, and Outback's Parent Bids $26.3 Million to Buy It Back
Out West Restaurant Group, which runs 61 Outback Steakhouses in five Western states, filed Chapter 11 on Monday — and Bloomin' Brands, the chain's owner, is already in line to buy the restaurants, which stay open.
The search term is "bloomin' brands," and the news behind it is a bankruptcy with a buyer already waiting. Out West Restaurant Group, one of Outback Steakhouse's only franchisees and the operator of 61 of its restaurants across five Western states, filed for Chapter 11 protection on Monday in federal bankruptcy court in Delaware, Nation's Restaurant News reported. The San Diego-based company listed between $10 million and $50 million in both assets and liabilities; its largest unsecured creditors are Performance Food Group, owed more than $4 million, and Matern Law Group, owed more than $1.6 million. The filing gave no explanation for the collapse.
The buyer is the franchisor itself. Bloomin' Brands, Outback's Tampa-based parent, has agreed to a $26.3 million base bid for substantially all of Out West's assets and expects to be named the stalking-horse bidder — the offer that sets the floor for any auction — while also providing up to $5.5 million in interest-free financing to keep the operator running through the case. The restaurants remain open for business during the proceedings, and Out West has asked the court for permission to keep paying employees, vendors and suppliers. Bloomin' described the filing as an "isolated incident" with no effect on its corporate operations or financing, and said owning the units directly would give it operational insight and let it fund the restaurants through its own development programs.
The deal would close a circle more than three decades wide. Out West began in 1992 as T-Bird Restaurant Group and became Bloomin's first franchisee, the operator that brought Florida-born Outback to the West Coast; Bloomin' later refranchised dozens of company-owned restaurants to it. The bankruptcy is also the endpoint of a three-year dispute — in December 2023 the two sides and Out West's lenders agreed to defer enforcement over earlier payment defaults, a truce the Chapter 11 filing now freezes in place. The sale, run under Section 363 of the Bankruptcy Code, terminates if it has not closed by January 31, 2027, unless extended.
What it means at a New York table is, for now, nothing — and the copy should say so plainly. None of the 61 restaurants in this filing is in New York; Out West's territory is the West, and Bloomin' says the case does not touch its corporate operations. Outback itself has been mid-turnaround: same-store sales at company-owned restaurants rose 1.4 percent in the quarter ended June 28, their best mark since early 2023, even as traffic fell 2.8 percent, behind a $75 million investment in food quality, marketing and service. The bankruptcy is a story about who owns the restaurants, not whether dinner is served.
